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10 tips to improve your financial management

Effective financial management will make it much easier to achieve your business goals. You’ll not only make progress more quickly but have the kind of operational perspective that facilitates effective use of resources, long-term planning and ensuring that the expectations of all stakeholders are being effectively handled too. These are our top tips to improve your financial management.

Invest in a business plan

A clear business plan sets out where you are now, as well as a clear path to where you want the business to be in both the short and the long term. It covers all essential elements, including cash flow and where it’s going to come from.
Set up systems to minimise late payments. Not getting paid on time can throw your financial management into chaos. Ensure that you have a reliable system of billing or invoicing in place and that the terms for payment are clearly set out. Using automated systems can help keep better track of payments - and chase them up if they are late.

Make sure your accounting systems are fit for purpose

Robust accounting is a huge advantage when it comes to financial management, as it will give you essential insight into the financial health of the business at all times. You’ll also be able to avoid unnecessary costs, such as fines for late payment of taxes or cash flow being affected because you haven't noticed that invoices have gone unpaid.

Check your financial progress regularly

Financial monitoring is vital for effective management. You should have key data at your fingertips at all times, from how much cash is currently in the bank to how leveraged the business is.

Be clear on your basic costs

It’s essential to have certainty when it comes to the day-to-day costs that will keep your business running. Rent, utilities and wages will all be part of this minimum.

Stay on top of your tax affairs

When tax management goes wrong it can be catastrophic for any business. From paying penalties and fines for not filing or making payments on time, to the costs of getting your tax bill wrong, staying on top of your tax affairs is essential to avoid financial mismanagement.

Make sure you have oversight on stock

Effective stock control is vital for positive financial management - not having the right amount of stock can lead to either excessive volumes or disappointed customers. There is a wealth of tech out there today to help you manage stock effectively.
Optimise efficiency. Looking for ways in which the business could be more efficient is an ongoing process. For example, could you save energy by changing the way you use heating or lighting so that you can cut the business’ costs?

Access the right funding sources

What is the ‘right’ funding source will be different for every business. That could be an overdraft, loan or venture capital funds.

Don’t put it off

When you come across a financial issue within the business, deal with it straight away. History is littered with examples of ignored financial problems that have gone on to escalate far beyond what they would have been if dealt with quickly.

If you’re keen to master financial management these tips are a great place to start. Find out more by booking onto our Maximising Cashflow, Sales and Profitability training course...